Icelandair Group today signed an agreement with a group of Czech private investors to buy the Czech airline Travel Service, the largest private airline in the Czech Republic. Travel Service operates charter flights to and from Prague and Budapest and also owns and operates the low cost airline Smart Wings. The turnover of Travel Service in 2006 was ISK 18 billion (EUR 190 Million). The company operates a total of 12 Boeing 737-800 and 737-500 passenger aircraft, carried over 1,8 million passengers last year and flies to multiple destinations on four continents. Under the agreement Icelandair Group will purchase 50% of the shares now, and will buy at least additional 30% of the shares within the period of one year. The current shareholders and the management have decided to stay on board in a minority shareholding. The purchase will be financed partially with loan capital as well as from the company's reserves. After the acquisition the estimated turnover of Icelandair Group for the year 2007 will be around ISK 72 billion, an increase of 30% from the year 2006. It is foreseen that the annual turnover of Icelandair Group will be over ISK 80 billion after the acquisition of Travel Service. Jón Karl Ólafsson, the CEO of Icelandair Group comments: “This acquisition is in accordance with Icelandair Group's intention of growing in the international charter flights sector. We have been looking towards Central and Eastern Europe for good business opportunities suiting our knowledge and experience. Last year we acquired the Latvian Airline Latcharter, which has been a success, and this is another big step. We look forward to working closely with the current leadership to ensure the continuing success of Travel Service.” Roman Vik, CEO of Travel Service, comments: "This is great news and recognition of the fantastic performance of the staff and management of Travel Service in recent years. We look forward to work with Icelandair Group; the management and former owners will continue to be partners and work in the company. The airline has a strong position in the fast growing charter and low cost market in Prague and Eastern Europe. The company operates in various fields, in charter and ACMI flights, in scheduled airline operation under a strong brand, Smart Wings, and is launching private jet operations, which is a rapidly growing market. The company has ambitious future plans, as can be seen by its orders of Boeing 737-900 and Boeing 787 Dreamliner Aircraft." Behrens Corporate Finance was an advisor to Icelandair Group thorough the transaction. The agreement will now be submitted for approval by Czech competition authorities. Further information provided by: Jón Karl Ólafsson, CEO of Icelandair Group, tel: 5050371, Sigthor Einarsson, COO of Icelandair Group, tel: 897-8363 and Gudjon Arngrímson, VP Corporate Communication, tel: 864-5849
- Icelandair Group buys Travel Service, the largest privately owned airline in the Czech Republic
| Source: Icelandair Group hf.